December 13 (SeeNews) - Standard & Poor's (S&P) said it has affirmed Serbia's long-term and short-term foreign and local currency sovereign credit ratings at BB+/B, and revised its outlook from stable to positive, the agency said.
The outlook revision was backed by an increase in net foreign direct investment (FDI) diversification, as well as by stronger external buffers, both of which should help Serbia decrease possible balance of payments risks, the global ratings agency said in a statement on Friday.
"We expect Serbia's economy will expand by about 7% in 2021 and by over 4% in 2022, following only a shallow contraction last year," S&P added.
S&P said it based its growth forecast on Serbia's not-so-stringent coronavirus restrictions on the economy, as well as to effective fiscal and monetary policy of the country's central bank.
"High net FDI inflows should continue to overfund Serbia's current account deficits and help to contain external debt and keep Serbia's foreign exchange reserve position strong," the ratings agency said.
Serbia's central bank, the NBS, said in a separate statement that the significance of the revision is accentuated by the fact it was made in the face of pandemic's prolonged duration, and globally-present supply chain disruptions.